Question: Customer volume is often highly uncertain. You can predict it, but you can't completely control it. So, let's calculate the number of customers Elena would


Customer volume is often highly uncertain. You can predict it, but you can't completely control it. So, let's calculate the number of customers Elena would need to serve at the F1 track to at least break even. Remember, Elena's contribution margin (CM) for each customer is $3 ($8 revenue per customer - $4 variable cost for barbecue meat - $1 variable costs for other supplies). With this in mind, the expected profit for the F1 Track is $600 (($3 CM per customer x 300 customers) - $100 fixed costs - $200 parking fee) How many customers need to show up at the F1 track for Elena to break even? Rank the possible parking locations from best to worst. Recall that for each customer the sales price is $8, the meat cost is $4, and other variable costs are $1; and the total fixed cost before parking is $100. F1 Track: 300 customers expected, Parking fee is $200 The Park: 200 customers expected, Parking fee is $50 Street Corner: 100 customers expected, Parking fee is $0
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
